What constitutes a Minor Transfer for an Exit franchise?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
If the Transfer is a Minor Transfer, the transfer fee is an amount equal to $500.00. The transfer fee is nonrefundable even if, for any reason, the proposed Transfer does not occur. For purposes of this section, the following definitions apply:
(B) Minor Transfer. Transfer of less than a 50% interest in this Agreement, or less than 50% interest in the equity or voting rights in the entity that owns or controls this Agreement or if the transfer is to an entity that has the same equity ownership as the transferor.
No transfer fee shall be payable by Franchisee to Subfranchisor, if an individual Franchisee assigns its interest to a legal entity in accordance with Section 14.2 of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, a Minor Transfer involves transferring less than 50% interest in the franchise agreement. This also applies to transferring less than 50% of the equity or voting rights in the entity that owns or controls the Exit franchise. Additionally, a transfer to an entity with the same equity ownership as the transferor is considered a Minor Transfer.
If a franchisee undertakes a Minor Transfer, they must pay a transfer fee of $500 to the Subfranchisor. This fee is nonrefundable, regardless of whether the transfer is completed. It is important to note that no transfer fee is payable if an individual franchisee assigns its interest to a legal entity according to Section 14.2 of the Franchise Agreement.
Understanding the distinction between Major and Minor Transfers is crucial for Exit franchisees, as it directly impacts the transfer fees and the conditions required for approval. Franchisees should carefully review Section 18 of the Franchise Agreement to fully understand their obligations and rights when considering a transfer of their franchise interest.